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Artificial intelligence and banks: a pairing which is here to stay
This is probably not the first time you've heard the concepts of AI and banking uttered in the same breath, and it definitely won't be the last. In recent years, banking has undergone turmoil and change at a scale which is nothing short of revolutionary. After the global financial crisis of 2007/08, the consumer lost confidence in the major banks, and a range of fintech solutions, alternative investment apparatus, and cryptocurrencies swept in to fill the void. If the banks are to survive in the form in which we know them, they also need to evolve. This evolution means adopting forward thinking and innovative practices, and achieving the flexibility and agility required to keep customers coming back. Artificial intelligence is going to play a big part in this.
Why AI is taking banking by storm
The ability to provide a tailored experience to customers
A tailored, bespoke experience for consumers has long been something of an impossible dream for service providers and retailers, not least for banks who must find the right trade-off between giving clients what they need and managing the vast amounts of resources required to do so.
But the financial landscape has changed. If the major banks say that customised experiences are simply not possible, then the customer will go and find that experience somewhere else. In short, they need to up their collective games, and artificial intelligence is the way to achieve this.
Banking is a data-intensive process for all concerned. The high volume of information which is provided by customers when they sign up is only enhanced by further data generated by transactions and activities. Banks harness this data to create a base level of information which can be used to help artificially intelligent systems get to know their customers better.
The scope for this is vast. Facial and voice recognition software deployed at the branch can instantly and securely access customer details and information, which can then be managed by artificially intelligent systems to provide a bespoke service. AI can learn about client behaviours via online banking platforms and develop an understanding of their needs and expected actions. All of this information can be used to create smart responses to customer queries and requests.
Better support for investors
Investors have a huge role to play in the operation of the major banks. Without investment funds and other revenue structures, banks would struggle to maintain the levels of capital they need to provide high-level functions.
The Swiss bank, UBS, has already announced the deployment of artificial intelligence on its trading floors, in a move intended to boost the performance of investors. This model can be applied elsewhere, using machine learning geared towards creating a less flawed version of human intelligence and judgement.
Investors will be able to draw upon the advice offered by these smart platforms at any time, securing high-level returns and better chances of success in the long term. Each time these platforms are used, the intelligent system can learn and hone its understanding. Typically, two systems will run in tandem to provide complete functionality; one system handles algorithmic machine learning duties, while the other system handles speech to text functionality for straightforward access to the platform.
Better information management
A bank - a major bank in particular - is both an information store and an information factory. Each day, an almost unimaginable volume of data flows into a bank, in the form of new contracts, client activity, market fluctuations, or another of the myriad events which fall under the purview of a large bank.
Artificial intelligence is now at the vanguard of attempts to stay on top of this information and to make it not only manageable but actively useful in the market. AI systems understand what they need to look for; they understand which patterns represent which outcomes, and they can handle ongoing data admin and management tasks with only minimal human input.
As the duties and responsibilities of banks increase in number - and as these banks aim to diversify their offerings to clients - AI is going to play an ever-growing role in underpinning the function of these institutions if they are to stay relevant in the face of the fintech revolution.
Improved capability across AI
Of course, none of this would be possible without one essential fact; the fact that artificial intelligence has experienced significant growth concerning capability and accessibility in recent years.
The reason that the big banks are now adopting AI across a multitude of different applications is a testament to this. While earlier forms of artificial intelligence required significant levels of guidance and data feeding, modern systems are primarily self-sufficient, learning organically and enabling banks to achieve positive results for their clients.
The outcome of this is dramatically increased efficiency. Artificially intelligent systems are not designed to replace human input in the workplace. Instead, they are intended to support human members of staff in their roles and to give them the freedom they need to perform at their very best.
For example, the Contract Intelligence platform which was recently deployed by JPMorgan Chase can accomplish high volume analytical and data management task in seconds. A manual review of the same volume of data, in comparison, would take 360,000 hours and would be a profound waste of time and resources. Ultra quick, ultra smart, ultra reliable; this is AI in 2019, and the possibilities are enormous.
What happens next for smart banks
The pairing of artificial intelligence and the mainstream banking sector is not something which we need to anticipate. It is already here, in a variety of different forms and applications. So, if adoption is already widespread, what is the next step?
The next step involves a cultural shift. Deploying artificial intelligence on a holistic basis is one thing, mapping out deficiencies in the network and bringing them up to speed through new and exciting technology, but this is still a world away from fostering a truly artificially intelligent eco-system within the firm.
What needs to happen? Artificial intelligence is not a sticking plaster or bandage but is a concept that informs and directs the ongoing development of the bank and its offerings. To achieve this goal, banks will have to stay open to change, retaining the flexibility which can only come from staying ahead of the curve.
The big banks are on the right track with artificial intelligence, but there is still some way left to go.